The practice of keeping high-risk assets on a bank's books while removing low-risk assets with the same capital requirement is know as

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This practice is known as regulatory arbitrage, where banks exploit differences in regulations and capital requirements to maximize profits. By removing low-risk assets with the same capital requirement, banks can free up capital to invest in higher-risk assets with potentially higher returns. This practice can be risky, as it can lead to banks being overexposed to high-risk assets that can cause significant losses if they default.

The Practice of Keeping High-Risk Assets on a Bank's Books